Brazil: after a disappointing fiscal framework, the stock market closes with a sharp drop
Ibovespa, the main indicator of the Brazilian Stock Exchange (B3), registered a sharp drop of over 2% to 103,000 points on Wednesday, 18.
The dollar rose significantly, by more than 2%, returning to a level above R$5.
The market assessed the integrity of the new fiscal framework as disappointing, and two factors were crucial for this to occur.
The first was the number of expenses that should remain outside the limits established by the new law.
Thirteen items will not be limited in the new framework, including expenses with court-order debts, transfers to states and municipalities, and investments in state-owned companies.
Another section that raised investor concern was the more flexible structure for compliance with the fiscal regime.
Some fundamental topics of the project, such as primary result targets and spending growth limits, will be defined by the government every year.
Because of this, consumer-related stocks registered a sharp drop in the stock market.
THE STOCK MARKET FALLS, AND THE DOLLAR RISES
With the disappointment with the fiscal framework, foreign investors also felt insecure.
With this, the dollar, which reached last week the value of R$4.91 – the lowest in months – returned to its former level.
Main stock market indexes
- Ibovespa: 103,912.94 (-2.12%)
- S&P 500: 4,154.54 (-0.01%)
- Nasdaq: 12,157.23 (+0.03%)
- Dow Jones: 33,897.34 (-0.23%)
- Dollar: R$5.08 (+2.22%)
- Euro: R$5.57 (+2.07%)
With information from Revista Oeste
Live Market IntelligenceBrazil — Live Market Board
Rio Times · Live Market Intelligence
Brazil — Live Market Board
+1.79%
170,934.30
+1.79%
65,223.89
+1.36%
11,379.66
+1.26%
2,904,791
+1.00%
2,465.35
+0.86%
58,698.13
+2.27%
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 170,934.30 | +1.79% | +21.85% | 167,927.15 | 168,310 | 167,142 | — |
| USD/BRL | 5.16 | +0.01% | -5.13% | 5.16 | 5.18 | 5.14 | — |
| SELIC | 14.00% | — | — | — | — | — | |
| PETR4 | 41.64 | -0.05% | +35.19% | 41.66 | 41.97 | 41.15 | 41,499,400 |
| VALE3 | 72.97 | +0.83% | +30.75% | 72.37 | 73.54 | 72.66 | 17,658,000 |
| ITUB4 | 38.60 | -1.03% | +4.57% | 39.00 | 39.34 | 38.39 | 29,487,800 |
| BBDC4 | 16.85 | +0.36% | +3.50% | 16.79 | 16.90 | 16.67 | 19,416,900 |
| BBAS3 | 19.37 | +0.47% | +0.73% | 19.28 | 19.44 | 19.16 | 11,069,200 |
| B3SA3 | 14.26 | -0.21% | +12.73% | 14.29 | 14.47 | 14.11 | 33,037,800 |
| ABEV3 | 14.89 | -0.80% | +21.91% | 15.01 | 15.07 | 14.81 | 16,453,100 |
| WEGE3 | 47.59 | +0.49% | +29.99% | 47.36 | 48.08 | 47.36 | 3,364,600 |
| PRIO3 | 59.14 | -0.19% | +50.67% | 59.25 | 59.81 | 58.74 | 3,325,600 |
| SUZB3 | 41.33 | +2.35% | -23.55% | 40.38 | 41.48 | 40.35 | 3,914,900 |
| RENT3 | 34.68 | -0.09% | +0.84% | 34.71 | 34.96 | 34.35 | 7,979,100 |
| AZZA3 | 15.89 | -2.63% | -53.76% | 16.32 | 16.42 | 15.82 | 1,330,300 |
| CSNA3 | 4.30 | +0.47% | -42.65% | 4.28 | 4.41 | 4.26 | 10,076,100 |
| GGBR4 | 24.69 | +2.19% | +51.38% | 24.16 | 24.85 | 24.18 | 7,047,600 |
| ENEV3 | 24.21 | -1.38% | +70.49% | 24.55 | 24.64 | 23.99 | 9,297,000 |
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